$93m Darlinghurst sale highlights inner-city office demand
Melbourne private investor Marks Henderson has expanded its Sydney portfolio with a high-profile $92.75 million office acquisition in inner-city Darlinghurst.
The boutique building at 19A Boundary St was sold by fund manager Haben Property, which is better known for its retail property plays.
Mercer Property’s Tom Speakman and Matt Davoren and CBRE’s Harry George negotiated the sale. The deal was struck at a tight initial yield of 4.7 per cent and a build rate of $14,300 per sqm, highlighting the demand for inner-city offices.
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The converted warehouse represents the latest Sydney investment for Marks Henderson, following the group’s March acquisition of 19 Foster St, Surry Hills, for $39.5 million.
Director Chris Marks says the acquisition “continues our theme of buying character buildings which are well positioned and appeal to creative and edgy tenants in the technology, advertising, media and information sectors”.
The fully leased Boundary Street building spans a total lettable area of 6480sqm and has tenants including creative agency Collider and chef Donna Hay.
It includes a ground floor retail showroom and secure parking for up to 51 vehicles.
“The sale campaign generated strong local, interstate and international buyer interest from both high net worth private investors and fund managers,” CBRE’s George says.
“Key drawcards included the building’s location, scale and unique attributes, including its substantial parking allocation, high ceilings, natural lighting, balconies and 360-degree views.”
Mercer Property’s Speakman says the mix of uses in the area is underpinning interest in assets that have strong fundamentals, with the Boundary St building home to 53 tenants.
“The property also offers significant upside, with scope for a considerable uplift in the existing rents and potential for a variety of future exit strategies,” Mr Speakman says.
Speakman says the building had a recent upgrade, including a new lift, end-of-trip facilities and a renovation of all amenities.
This article originally appeared on www.theaustralian.com.au/property.
